FranCast

The Ontario Healthy Menu Choices Act, 20151 and its regulation2 become effective January 1, 2017. The Act, which received Royal Assent in May 2015, sets out the parameters for menu labeling when a food establishment has 20 or more food service premises in Ontario.

By January 1, 2017, “restaurant chains” covered by this legislation will be required to provide their customers with specific calorie information, in a concise and accessible manner, for most food and drink to be consumed or taken away, so that these customers can make informed and, ideally, more healthy decisions.

This legislation addresses any form of menu or advertising that sets out standard food items and their prices, meaning that menus will likely need to be reprinted or revised to add this information; thereafter, whenever menus are altered or updated, these menus will also require revisions to reflect these requirements. In addition, food establishments will also have to incur the costs to ascertain the number of calories in their standard food items.

The Act contains the majority of the relevant definitions, describes information that must be displayed, provides for inspection procedures and sets out enforcement measures when the law is contravened. The Regulation adds a few additional definitions, but primarily specifies how and where the information is to be displayed, provides for some exemptions and prescribes how calorie information is to be determined.

Ontario, at the moment, is the only Canadian jurisdiction that has put in place such labelling laws. This is in contrast to the United States, which is proceeding on a federal basis and recently released a guidance document to assist businesses in understanding the legislation, as outlined in our May 5, 2016 FranCast.

Here is some basic information about the proposed Ontario regime for franchisors and franchisees:

Definitions: Of note in the Act are two key definitions: “food service premises” and “chain of food service premises.” A food establishment that falls within these definitions will be regarded as a “regulated premise” and will be required to comply with the Act and the Regulation.

“Food service premises” are establishments where meals or parts thereof are prepared for immediate consumption or sold or served in a format that will enable immediate consumption, either on the premises or not.

A “chain of food service premises” means “20 or more food service premises in Ontario that operate under the same or substantially the same name, regardless of ownership, and that offer the same or substantially the same standard food items.”

A “standard food item” means “a food or drink item that is sold or offered for sale in servings that are standardized for portion and content, and that meets the additional requirements, if any, that may be specified in the regulations, but does not include any food or drink item that is exempted by the regulations.”

Covered establishments: The Act provides that it is applicable to a person who has responsibility for and control over the activities carried on at regulated premises, and may include a franchisor, a licensor, a person who operates these premises through a subsidiary, and a manager of a regulated premises, but does not include an employee who is not a manager. Thus, franchisors with 20 or more locations in Ontario may be included (emphasis added).

Exempt establishments: The Regulation exempts certain premises, including correctional institutions, food service premises in schools and in child care centres, and also those premises that operate for less than 60 days in a calendar year. So locations at summer markets and fairs as well as food services operations at specialized events that do not operate a total of 60 days/year are exempt.

Nutritional labelling for covered establishments: The Act requires every person who owns or operates a regulated premises to display the number of calories of every standard food item sold or offered for sale and any other information required by the regulations. To date, only calories are addressed in the Regulation. (This is unlike the US federal menu labelling laws, which also include certain nutrient values.)

Where displayed: Ontario is requiring the calorie information be displayed on each menu and where the standard food item is on display, adjacent thereto on labels or tags. “Menu” is defined in the Regulation. It includes paper, electronic or drive-through menus, menu boards, online menus or menu apps, advertisements, and promotional flyers. There are some exceptions for menus placed outside the premises if no pricing is shown.

Signs setting out daily intake: Each regulated premises must also have a sign in the premises that sets out the daily calorie intake an average adult requires: “The average adult requires approximately 2,000 to 2,400 calories per day; however, individual calorie needs may vary”. If food at the premises is targeted to children, then similar information must be listed in respect of the average daily calorie intake for the average child aged 4-8 years and aged 9-13 years. All these signs must also bear a notation that ”individual calorie needs may vary”. (As noted, nutrient values are not yet required to be disclosed.)

Information display: The way the calorie content should be set out is prescribed by the Regulation. This includes the location of the information, the font, the format and information regarding how the number of calories is to be specified. If the standard food item is available in more than one flavour, variety or size, the Regulation stipulates how to list a range of calories. The Regulation also stipulates how to address those items that are commonly shared at restaurants, for example by displaying the number of calories of a serving and the number of servings.

Combination meals: If a “combination meal” is set out on a menu, with two or more variable items, the Regulation prescribes how that is to be addressed.

Self-serve: For self-serve items, such as soda dispensers, information is required to be posted in respect of the food or drink item in such a way that an individual could be expected to associate the calorie declaration with the respective serving size.

Alcohol: The information required by the Act to be displayed in regulated premises does not extend to alcohol, provided that the information in the following table, in substantially the same format, is displayed in close proximity to the place where the alcoholic beverage is listed on the menu, label or tag. In the case of a menu with multiple pages, the information must be visible when the menu is opened to any page that lists alcoholic beverages.

Standard Alcoholic Beverages

Standard Serving Size

Approximate Average Calories per Standard Serving Size

Red wine (12%)

1 glass (142 mL/5 oz.)

130

White wine (12%)

1 glass (142 mL/5 oz.)

120

Regular beer (5%)

1 bottle (341 mL)

150

Light beer (4%)

1 bottle (341 mL)

100

Spirits (40%)

1 shot (43 mL/1½ oz.)

100

Note: Actual calories of alcoholic beverages may vary; the addition of mixes will increase the calories of these beverages. Standard serving sizes are based on one drink as outlined in Canada’s Low-Risk Alcohol Drinking Guidelines.

Exempt foods: The Regulation exempts certain food items that are prepared for specific places and certain premises. Food or drink items prepared for patients in hospitals and residents of long-term-care facilities are also exempt from the concept of a standard food item. Food or drink items offered for sale for less than 90 days per calendar year are also exempt, such as some seasonal items. Self-serve condiments that are available free of charge and not listed on any menu are also exempt.

Enforcement and fines: The Act provides for inspectors to be appointed to monitor compliance and sets out powers for these inspectors. The Act also provides for fines for failure to comply and requires directors and officers of a corporation that own or operate a regulated premises to take all reasonable care to ensure that the Act and Regulation are complied with.

Every individual who contravenes the Act may be liable for a fine of CA$500 for every day not in compliance for a first offence and CA$1,000 for a second or further offence. For a corporation, the fines are up to CA$5,000 a day for a first offence and up to CA$10,000 for each subsequent offence. Every director or officer of a corporation that owns or operates a regulated premises is required to take reasonable care to ensure the Act and Regulation are complied with.

What do franchisors and franchisees need to do?

Franchisors and franchisees have several months to determine if they need to comply and, if so, to ensure their businesses are ready by January 1, 2017. The Act and Regulation are specific and detailed and need to be carefully reviewed when preparing new menus, signage and advertising. Franchise systems with more than 20 locations in Ontario now have additional obligations to consider which will be costly and complicated. In addition, more regulations under the Act are likely. If you have any questions regarding compliance with the Ontario Healthy Menu Choices Act, 2015 or require further information, please contact Sandra Appel.